Judicial Review of the Fairness and Reasonableness, as between Class Members, of Federal Class Action Settlements

Abstract

Settlement is the most common way in which federal class actions are resolved in Australia. In order to safeguard the interests of absent class members the settlement or discontinuance of class actions must be judicially approved. A crucial component of this judicial scrutiny entails a determination of whether the settlement in question gives preferential treatment to some class members over others and, if so, whether there are strong reasons that justify the approval of the settlement agreement notwithstanding this differential treatment. Despite the conceptual and practical importance of this dimension of the judicial review of class action settlements, it has been largely ignored in the legal literature. The aim of this article is to address this lacuna by exploring the way in which federal trial judges have, over the last 25 years or so, evaluated the fairness and reasonableness, between the class members inter se, of federal class action settlements.